US Treasury Secretary Bessent confirmed on the 2nd that the coordinated foreign exchange action on July 31 effectively curbed disorderly fluctuations of the yen. Japanese Finance Minister Katsuki Katayama stated on the 3rd that the US and Japan jointly intervened in the foreign exchange market by buying yen.
Since the beginning of this year, the yen exchange rate has continued to weaken. In late July, the yen-to-dollar exchange rate once approached 164 yen to 1 US dollar.
Bessent said that the US-Japan alliance is built on the foundation of economic security as national security. The Treasury Department will continue to closely monitor developments, maintain close communication with the Japanese Ministry of Finance and the Bank of Japan, and will not hesitate to participate in further joint interventions.
Bessent emphasized that the Federal Reserve's Foreign and International Monetary Authorities (FIMA) repo facility is an important backstop and will be expanded in the future. The US supports Japan in taking decisive market and monetary measures to correct the severe undervaluation of the yen.
Apart from special times such as financial crises or major disasters, joint US-Japan interventions in the forex market are extremely rare. According to NHK, this is the first joint forex intervention by both parties since the Great East Japan Earthquake in 2011—a gap of 15 years.
US President Trump said that US participation in last week’s intervention was meant to demonstrate the friendship between the two countries. Speaking to reporters on Air Force One on the 2nd, he said: “They needed a little help, and we will always support Japan.”
“Japan has always been good to us—of course, except for the Pearl Harbor incident. What’s most important is that this is a friendly signal.”
When asked what benefits the US gained from this forex intervention, Trump said it would bring “economic benefits.”